Emmanuel Pandora: Multiple Choice Questions

FB: EMMANUEL PANDORA CHUYÊN CUNG CẤP TÀI LIỆU UEF
Multiple Choice Questions
1. The downward slope of the demand curve again illustrates the pattern that as _____________
rises, ______________ decreases.
A. quantity demanded, price

B. quantity supplied, quantity demanded
A
C. price, quantity demanded
D. price, quantity supplied
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Answer: C
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D
2. The nature of demand indicates that as the price of a good increases:
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A. suppliers wish to sell less of it.
B. more of it is produced.
C. more of it is desired.
D. buyers desire to purchase less of it.
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Answer: D
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3. Any given demand or supply curve is based on the ceteris paribus assumption that
_________________________.
A. everything is variable.
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B. all else is held equal

C. no one knows which variables will change and which will remain constant.
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D. what is true for the individual is not necessarily true for the whole.
Answer: B
4. The term "ceteris paribus" means that:
A. everything is variable.
B. all variables except those specified are constant.
C. no one knows which variables will change and which will remain constant.
D. what is true for the individual is not necessarily true for the whole.
Answer: B
MỌI THẮC MẮC VÀ Ý KIẾN ĐÓNG GÓP XIN VUI LÒNG IB QUA FB
5. A supply curve is a graphical illustration of the relationship between price, shown on the vertical
axis, and _________________, shown on the horizontal axis.
A. demand
B. quantity
C. quantity supplied
D. quantity demanded
A
Answer: B
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D
6. Economists refer to the relationship that a higher price leads to a lower quantity demanded as the
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_____________________.
A. income gap
B. market equilibrium
C. law of demand
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D. price model
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Answer: C
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AN
7. A demand curve shows the relationship between price and ______________ on a graph.
A. quantity demanded
B. quantity produced
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C. economies of scale
D. costs
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Answer: A
8. _____________ refers to the total number of units that are purchased at that price.
A. quantity
B. quantity demanded
C. supply
D. market quantity
Answer: B
9. In economics, the demand for a good refers to the amount of the good that people:
A. would like to have if the good were free.

B. will buy at various prices.
C. need to achieve a minimum standard of living.
D. will buy at alternative income levels.
A
Answer: B
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O
D
Type: Multiple Choice Difficulty: Easy Category: Understand
N
PA
10. The demand curve for a typical good has a(n):
A. negative slope because some consumers switch to other goods as the price rises.
B. negative slope because consumer incomes fall as the price of the good rises.
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C. negative slope because the good has less "snob appeal" as its price falls.
D. inverse slope because as the price goes up, the good has more profitability.
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Answer: A
AN
M

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11. When economists talk about supply, they are referring to a relationship between price received
for each unit sold and the ________________.
A. demand schedule
B. market price
C. quantity supplied
D. demand curve
Answer: C
Type: Multiple Choice Difficult: Category: Remember
12. But nearly all supply curves share a basic similarity: they slope ________________.
A. down from left to right

B. up from left to right
C. up from right to left
D. down from right to left
Answer: B
A
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13. The demand schedule for a good:
D
A. indicates the quantity that people will buy at the prevailing price.
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B. indicates the quantities that suppliers will sell at various market prices.
C. is determined primarily by the cost of producing the good.
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D. indicates the quantities that will be purchased at alternative market prices.
Answer: D
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14. When quantity demanded decreases in response to a change in price:

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A. the demand curve shifts to the right.

B. the demand curve shifts to the left.
C. there is a movement down along the demand curve.
D. there is a movement up along the demand curve.
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Answer: D
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15. The _________ is the only price where quantity demanded is equal to quantity supplied.
A. equilibrium price
B. horizontal axis intercept
C. vertical axis intercept
D. market price
Answer: A
16. After widespread press reports about the dangers of contracting "mad cow disease" by
consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from
Canada is:
A. no change; only the supply curve for beef is likely to be affected.
B. a shift of the demand curve for beef to the left.

C. a movement down along the demand curve for beef to the right.
D. a shift of the demand curve for beef to the right.
Answer: B
A
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Type: Multiple Choice Difficulty: Easy Category: Analyze
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D
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Figure 3-1
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AN
17. Refer to Figure 3-1. Using the graph above and beginning on D1, a shift to D2 would indicate a(n):
A. increase in quantity demanded.

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B. decrease in quantity demanded.

C. increase in demand.
D. decrease in demand.
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Answer: C
A
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Figure 3-2
D
18. Refer to Figure 3-2. A change from Point A to Point B represents a(n):
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A. increase in demand.
B. decrease in demand.
C. decrease in quantity demanded.
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D. increase in quantity demanded.
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Answer: C
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AN

M
19. If new manufacturers enter the computer industry, then (ceteris paribus):
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A. the supply curve shifts to the left.

B. the supply curve shifts to the right.
C. the demand curve shifts to the left.
D. some established manufacturers must exit the industry.
Answer: B
20. If a firm faces _____________________, while the prices for the output the firm produces remain
unchanged, a firm’s profits will increase.
A. higher demand
B. lower costs of production
C. equilibrium
D. a shift in demand
Answer: B
21. When __________________, a firm will supply a higher quantity at any given price for its output,
and the supply curve will shift to the right.
A
A. prices rise
B. equilibrium is achieved
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C. costs of production fall
D. there is a population increase
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Answer: C
D
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22. A severe freeze has once again damaged the Florida orange crop. The impact on the market for
orange juice will be a leftward shift of:
A. the supply curve.

PA
B. the demand curve, as consumers try to economize because of the shortage.
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C. both the supply and demand curves.

D. the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.
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Answer: A
AN
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Type: Multiple Choice Difficulty: Medium Category: Analyze

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Figure 3-3
23. Refer to Figure 3-3. A change from Point A to Point E represents a(n):
A. increase in supply.
B. decrease in supply.
C. increase in quantity supplied.
D. decrease in quantity supplied.
Answer: B
A
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24. Refer to Figure 3-3. A change from Point A to Point D represents a(n):
D
A. decrease in quantity supplied.
B. increase in quantity supplied.
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C. decrease in supply.
D. increase in supply.
Answer: D
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25. Refer to Figure 3-3. A change from Point A to Point B represents a(n):
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A. increase in supply.
B. decrease in supply.
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C. increase in quantity supplied.

D. decrease in quantity supplied.
Answer: C
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EM
26. A drought decreases the supply of agricultural products, which means that at any given price a
lower quantity will be supplied; conversely, especially good weather would shift the
_________________________.
A. demand curve to the right

B. supply curve to the left
C. supply curve to the right
D. demand curve to the left
Answer: C
27. A change in price of a good or service typically causes ________________ for that specific good
or service.
A. a new equilibrium price

B. a change along the supply curve
C. the supply curve to shift
D. a decreased demand
A
Answer: B
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28. According to the law of supply:
D
A. there is a direct relationship between price and the quantity supplied.
B. there is an inverse relationship between price and the quantity supplied.
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C. there is a direct relationship between price and quantity demanded.
D. there is an inverse relationship between price and quantity demanded.
Answer: A
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29. Which of the following would reduce the supply of microcomputers?

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A. a technological improvement that lowers the cost of producing the computers

B. higher wage rates for the workers that assemble the computers
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C. a reduction in the price of computer chips used to produce the computers

D. a reduction in the price of computers.
Answer: B
M
EM
30. Interpret the following statement: "An increase in the price of wheat will encourage farmers to
increase the quantity of wheat supplied to the market."
A. The statement is correct.

B. The statement would be correct if "quantity of wheat demanded" were substituted for "quantity
of wheat supplied."
C. The statement is incorrect because it confuses a change in quantity supplied with a change in
supply.
D. The statement would be correct if it read that a "decrease in the price of wheat will encourage
farmers to increase the quantity of wheat supplied to the market."
Answer: A
31. ___________________ are enacted when discontented sellers, feeling that prices are too low,
appeal to legislators to keep prices from falling.
A. Rent controls
B. Price ceilings
C. Price floors
D. Subsidies
A
Answer: C
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32. Andy views beer and pizza as complements to one another. If the price of pizza decreases,
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economists would expect:
D
A. Andy's demand for pizza to increase.
B. Andy's demand for pizza to decrease.
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C. Andy's quantity of pizza demanded to decrease.
D. Andy's demand for beer to increase.
Answer: D
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EL
33. If an increase in the price of Good X causes a decrease in the demand for Good Y, we can
conclude that:
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A. the price of Good Y will increase.

AN
B. Goods X and Y are normal goods.

C. Goods X and Y are substitute goods.
D. Goods X and Y are complement goods.
M
Answer: D
EM
34. If the price is below the equilibrium level, then the quantity demanded will exceed the quantity
supplied. This is known as ________________.
A. excess supply
B. excess demand
C. ceteris paribus
D. a price ceiling
Answer: B
35. The _______________ is the quantity where quantity demanded and quantity supplied are equal
at a certain price.
A. quantity demanded
B. equilibrium quantity
C. demand schedule
D. supply schedule
Answer: B
A
Essay Questions
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1. Various factors cause a demand curve to shift. List four different factors.
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D
Various factors may cause a demand curve to shift: changes in income, changes in population,
changes in taste, changes in expectations of future prices.
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Type: Essay Difficulty: Medium Category: Understand
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2. What are five things that will shift a supply curve to the right?
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(any five of)

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• A decrease in the price of a substitute in production.

• An decrease in input prices which make production less expensive.
AN
• A change in technology.
• An expected decrease in future price.
• An increase in the number of producers.
• Deregulation.
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• A reduction in taxes or an increase in subsidies.

• Weather.
EM
Type: Essay Difficulty: Hard Category: Understand
3. Define consumer surplus and producer surplus.
Consumer surplus is the gap between the price that consumers are willing to pay, based on their
preferences, and the market equilibrium price. Producer surplus is the gap between the price for
which producers are willing to sell a product, based on their costs, and the market equilibrium price.

Emmanuel Pandora: Multiple Choice Questions

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FB: EMMANUEL PANDORA CHUYÊN CUNG CẤP TÀI LIỆU UEF

Multiple Choice Questions

A. quantity demanded, price

B. all else is held equal

4. The term "ceteris paribus" means that:

A. would like to have if the good were free.

Type: Multiple Choice Difficulty: Easy Category: Understand

Type: Multiple Choice Difficult: Category: Remember

A. down from left to right

14. When quantity demanded decreases in response to a change in price:

A. the demand curve shifts to the right.

A. no change; only the supply curve for beef is likely to be affected.

B. a shift of the demand curve for beef to the left.

A. increase in quantity demanded.

B. decrease in quantity demanded.

Type: Multiple Choice Difficulty: Easy Category: Understand

Type: Multiple Choice Difficulty: Easy Category: Understand

A. the supply curve shifts to the left.

A. the supply curve.

C. both the supply and demand curves.

Type: Multiple Choice Difficulty: Medium Category: Analyze

C. increase in quantity supplied.

A. demand curve to the right

A. a new equilibrium price

29. Which of the following would reduce the supply of microcomputers?

A. a technological improvement that lowers the cost of producing the computers

C. a reduction in the price of computer chips used to produce the computers

A. The statement is correct.

A. the price of Good Y will increase.

B. Goods X and Y are normal goods.

(any five of)

• A decrease in the price of a substitute in production.

• A reduction in taxes or an increase in subsidies.

Type: Essay Difficulty: Hard Category: Understand

3. Define consumer surplus and producer surplus.

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